BRM – December 2018 monthly update

1
Monthly Update
December 2018
BRM NAV
$
0.64
SHARE PRICE
$
0.61
WARRANT PRICE
$
0.01
as at 30 November 2018
A word from the Manager
ASX 200 Market Performance
Equity market volatility from October continued in November
with the ASX200 Index returning –2.2% (in A$) for the month.
Only the Financials (+1.4%) and the Information Technology
(+1.0%) sectors edged into the green during the month.
Affected by the negative swings in crude oil prices, Energy was
the worst performing sector closing down -10.3% for the month.
The Consumer Discretionary (-5.2%), Materials (-4.8%) and
Healthcare (-4.0%) sectors also weighed on the index’s return.
Portfolio News
Our investment team travelled to Sydney in early November
and caught up with a number of our portfolio company
management teams at an investor conference. As a
generalisation, although there were pockets of caution evident
in the rhetoric from the management teams that we met with,
the tone was generally constructive, and provided our team with
plenty of food for thought.
Dominos (-14.9% in A$) our worst performer in the month
traded down off the back of soft AGM commentary regarding
their current trading conditions, albeit management re-affirmed
guidance for FY19. Overall same store sales growth for the
group is tracking slightly behind expectation. A hot summer
negatively impacted their European operations. Commentary
around the Australian and NZ operations was also muted,
albeit they do have some cost tailwinds which should help their
first half performance. Their Japanese operation continues to
improve as new management in that division gains traction
with their initiatives. While it would be great if all geographies
could fire on all cylinders all the time, some of this softness
is transitory, and we’re excited by the longer-term growth
opportunity across their different jurisdictions.
Aristocrat (-10.7%) missed market expectation in announcing
its full year result in the month. The result included double digit
underlying earnings growth for the year. This was driven by a
strong performance within its land-based gaming operations.
But this was offset by a messy result from the digital division as
recent acquisitions were integrated into the group. The digital
division nevertheless grew profitability strongly during the
year and management expects this to continue into FY19. The
scheduled timing of new game releases means that this growth
will be skewed towards the second half of the financial year.
Management is maintaining its focus on investing in innovation,
design and development which has historically underpinned its
growth in profitability.
OML (-8.9%) was negatively impacted by concerns around the
potential for weaker consumer spending to translate into a
weaker advertising environment. In addition, OML, through its
recently acquired subsidiary Adshel, was materially exposed
to the renewal of a street furniture contract with Brisbane
City Council (BCC). This contract renewal was expected to be
finalised in October and a dearth of information relating to the
renewal led to speculation that OML had potentially lost the
contract. This also weighed on the share price which was down
as much as -16% during the month. Late in November OML
pleasingly confirmed the BCC contract had been renewed with
Adshel and this saw the share price recover some lost ground
into month end.
AUB (-8.3%) suffered from some capital raising indigestion
after issuing equity to fund an increase in its shareholding of
one of its brokerage subsidiaries. Proceeds from the capital
raising were also used to de-gear AUB’s balance sheet.
This provides AUB with additional funding headroom and
increased capability to continue growing through acquiring
new stakes and/or adding to their existing holdings in
insurance brokerages. Given management’s successful track
record over many years of building on their ‘owner-driver’
model through acquisition, this seems to us like a sensible
step for them to take.
Link (-6.8%) disappointed the market at its AGM with ‘mild’
first half outlook commentary predicated on lower non-
recurring revenue in funds administration, coupled with Brexit
related uncertainty leading to delays in on-boarding clients in
its UK division. Link also pointed to a second half skew to the
realisation of cost benefits from acquisition related integration
programmes.
Xero (+0.25%) reported an uneventful full year result during
the month, with evidence of pricing power in the ANZ
markets, and some early encouraging signs of subscription
growth in Canada.
DISCOUNT
1
4.3
%
1
Share Price Discount to NAV (including warrant price on a pro-rated basis)

Sector Split
as at 30 November 2018
Key Details
as at 30 November 2018
FUND TYPE
Listed Investment Company
INVESTS IN
Growing Australian companies
LISTING DATE
26 October 2006
FINANCIAL YEAR END
30 June
TYPICAL PORTFOLIO SIZE
25-35 stocks
INVESTMENT CRITERIA
Long–term growth
PERFORMANCE
OBJECTIVE
Long–term growth of capital and
dividends
TAX STATUS
Portfolio Investment Entity (PIE)
MANAGER
Fisher Funds Management
Limited
MANAGEMENT
FEE RATE
1.25% of gross asset value
(reduced by 0.10% for every 1% of
underperformance relative to the
change in the NZ 90 Day Bank Bill
Index with a floor of 0.75%)
PERFORMANCE
BENCHMARK
Changes in the NZ 90 Day Bank
Bill Index + 7%
PERFORMANCE
FEE HURDLE
15% of returns in excess of
benchmark and high water mark
HIGH WATER MARK
$0.69
SHARES ON ISSUE
168m
MARKET CAPITALISATION
$103m
GEARING
None (maximum permitted 20%
of gross asset value)
11
%

HEALTH CARE
20
%
11
%
COMMUNICATION
SERVICES
20
%

INDUSTRIALS

FINANCE
20
%
INFORMATION
TECHNOLOGY
3
%

CASH
8
%
CONSUMER
DISCRETIONARY
In Next DC’s (+9.7%) presentation at the investor
conference in Sydney, management announced their
latest (and largest) contract win with a hyperscale customer
equating to 9MW of capacity. This contract win alleviated
some market concerns over Next’s ability to sell the capacity
it has been building out across a number of Australian cities,
and provided further evidence of the structurally rising
demand for data centre capacity in Australia. Management
took the opportunity to also re-affirm FY19 guidance.
Technology One (+16.0%) delivered a solid FY18 result in
November. The result saw Technology One return to mid
double digit earnings growth after a weaker FY17. This was
driven by strong growth in annual recurring revenues which
now make up 57% of total revenues. The signing of new
SaaS customers in addition to migrating existing desktop
customers to the cloud continues to be a key driver of
margin expansion. The business continues to invest in its
current and next generation SaaS offerings which should
drive future customer wins, and management seems
committed to expanding their presence in the UK after a few
years of teething issues in this market.
2
%

REAL ESTATE
2
Robbie Urquhart
Senior Portfolio Manager
Fisher Funds Management Limited
5
%

MATERIALS
Wisetech (+16.5%) continued its volatile journey,
rebounding strongly after a weak October, and we suspect
was assisted by improving sentiment to the information
technology sector after October’s sell-off. There was no
major news linked to the company in the month.
Portfolio Changes
We used the opportunity provided by the equity market
driven softness in Resmed’s share price to increase our
weighting in the company. Management continues to
execute well and we have increased confidence in the
earnings outlook for the next few years given the recent
favourable regulatory outcome in the latest round of the
competitive bidding process in the US.

3
November’s Biggest Movers in Australian dollar terms
Typically the Barramundi portfolio will be invested 90% or more in equities.
WISETECH GLOBAL
+17
%
TECHNOLOGY ONE
+16
%
NEXTDC
+10
%
DOMINO’S PIZZA
-15
%
ARISTOCRAT LEISURE
-11
%
5 Largest Portfolio Positions as at 30 November 2018
CARSALES.COM
7
%
SEEK
8
%
CSL LIMITED
7
%
COMMONWEALTH
BANK OF AUSTRALIA
5
%
WISETECH
5
%
The remaining portfolio is made up of another 22 stocks and cash.
Oct
2006
Oct
2007
Oct
2008
Oct
2009
Oct
2010
Oct
2011
Oct
2012
Oct
2013
Oct
2015
Oct
2016
Oct
2014
Share Price/Total Shareholder Return
$
1.00
$
1.20
$
0.8 0
$
0.60
$
0.40
Share PriceTotal Shareholder Return
$
1.60
$
0.20
$
0.00
$
1.40
Oct
2017
Oct
2018
Total Shareholder Return to 30 November 2018
1 Month3 Months1 Year3 Years
(annualised)
Since Inception
(annualised)
Company Performance
Total Shareholder Return(3.2%)(2.5%)+11.5%+8.0%+3.5%
Adjusted NAV Return(1.9%)(12.6%)(0.3%)+5.7%+3.5%
Portfolio Performance
Gross Performance Return(1.4%)(11.8%)+2.9%+9.1%+6.9%
Benchmark Index^(2.8%)(9.9%)(1.8%)+7.8%+2.4%
Performance to 30 November 2018
^Benchmark Index: S&P/ASX Small Ords Industrial Gross Index until 30 September 2015 & S&P/ASX 200 Index (hedged 70% to NZD) from 1 October 2015
Non–GAAP Financial Information
Barramundi uses non–GAAP measures, including adjusted net asset value, adjusted NAV return, gross performance return and total shareholder return. The rationale for using such non–GAAP measures is as follows:
»adjusted net asset value – the underlying value of the investment portfolio adjusted for capital allocation decisions,
»adjusted NAV return – the return to an investor after fees and tax,
»gross performance return – the Manager’s portfolio performance in terms of stock selection and currency hedging before fees and tax, and
»total shareholder return – the return to an investor who reinvests their dividends, and if in the money, exercises their warrants at warrant maturity date for additional shares.
All references to adjusted net asset value, adjusted NAV return, gross performance return and total shareholder return in this monthly update are to such non–GAAP measures. The calculations applied to non–GAAP
measures are described in the Barramundi Non–GAAP Financial Information Policy. A copy of the policy is available at http://barramundi.co.nz/about-barramundi/barramundi-policies/

Disclaimer: The information in this update has been prepared as at the date noted on the front page. The information has been prepared as a general summary of the matters covered only, and it is by
necessity brief. The information and opinions are based upon sources which are believed to be reliable, but Barramundi Limited and its officers and directors make no representation as to its accuracy
or completeness. The update is not intended to constitute professional or investment advice and should not be relied upon in making any investment decisions. Professional financial advice from
an authorised financial adviser should be taken before making an investment. To the extent that the update contains data relating to the historical performance of Barramundi Limited or its portfolio
companies, please note that fund performance can and will vary and that future results may have no correlation with results historically achieved.
Barramundi Limited
Private Bag 93502, Takapuna, Auckland 0740
Phone: +64 9 489 7074 | Fax: +64 9 489 7139
Email: enquire@barramundi.co.nz | www.barramundi.co.nz
4
Computershare Investor Services Limited
Private Bag 92119, Auckland 1142
Phone: +64 9 488 8777 | Fax: +64 9 488 8787
Email: enquiry@computershare.co.nz | www.computershare.com/nz
About Barramundi
Barramundi is an investment
company listed on the New
Zealand Stock Exchange. The
company gives shareholders
an opportunity to invest
in a diversified portfolio of
between 25 and 35 quality
growing Australian companies
through a single, professionally
managed investment. The aim of
Barramundi is to offer investors
competitive returns through
capital growth and dividends.
Capital Management Strategies
Regular Dividends
»Quarterly distribution policy introduced in
August 2009
»Under this policy, 2% of average NAV is targeted
to be paid to shareholders quarterly
»Dividends paid by Barramundi may include
dividends received, interest income, investment
gains and/or return of capital
»Shareholders who prefer to have increased
capital rather than a regular income stream have
the opportunity to participate in the company’s
dividend reinvestment plan (DRP)
»Shares issued to DRP participants are at a 3%
discount to market price
»Barramundi became a portfolio investment entity
on 1 October 2007. As a result, dividends paid to
New Zealand tax resident shareholders have not
been subject to further tax
Share Buyback Programme
»Barramundi has a buyback programme in place
allowing it (if it elects to do so) to acquire up to 8.4m of
its shares on market in the year to 31 October 2019
»Shares bought back by the company are held as
treasury stock
» Shares held as treasury stock are available to be
re–issued for the dividend reinvestment plan and to pay
performance fees
Warrants
»On 16 October 2018, a new issue of warrants (BRMWE)
was announced
»The warrants were issued 1 November 2018 at no cost
to eligible shareholders and in the ratio of one warrant
for every four Barramundi shares held
»Exercise Price = $0.64 per warrant, to be adjusted down
for dividends declared during the period up to the
Exercise Date.
»Exercise Date = 25 October 2019
»The final Exercise Price will be announced and an
Exercise Form will be posted to warrant holders in
September 2019
Management
Barramundi’s portfolio is managed
by Fisher Funds Management
Limited. Robbie Urquhart
(Senior Portfolio Manager),
Terry Tolich (Senior Investment
Analyst) and Delano Gallagher
(Investment Analyst) have prime
responsibility for managing the
Barramundi portfolio. Together
they have significant combined
experience and are very capable
of researching and investing in the
quality Australian companies that
Barramundi targets. Fisher Funds
is based in Takapuna, Auckland.
Board
The Manager has authority
delegated to it from the
Board to invest according to
the Management Agreement
and other written policies.
The Board of Barramundi
comprises independent
directors Alistair Ryan (Chair),
Carol Campbell and Andy
Coupe; and non–independent
director Carmel Fisher.